"We saw a lot of road kill and thought of you." —my sister
For more information on oil prices, click here. Podcasts of My Intro Economics lectures (in .wma format) For my 2005 Radio Economics MP3 podcasts, go to the bottom of the page that lists the lecture podcasts.
Canada
United States
Israel
My email address: [email protected] My 2005 post about the housing crisis, before it happened, is here.
Junior Felix was a flash star for the Trono Blue Jays way back when. We commented on it yesterday when we saw Adam Lind hit a triple to a deep corner at Fenway Park, and we remarked that was the same place Junior Felix hit a grand slam inside-the-park home run.
It turns out that Junior Felix had likely lied (significantly) about his age. When the Marlins drafted him in the expansion draft, his stated age was 25 but many people suspected he was well over 30. He was released after playing only 57 games.
I wonder if the Marlins are having him at the park today as they celebrate their 20th anniversary. After all, he did appear in the first game that team played.
I really must take my time and read the labels more carefully at the LCBO [Liquor Control Board of Ontario, the gubmnt monopoly of retail liquor sales in Ontario]. On the same trip when I mistakenly bought the sparkling shiraz [ugh!], I also picked up a cute little 200ml bottle in the scotch section called Glenglassaugh "Peated". It says it is 50% alcohol, which is very nearly cask strength, and it is clear. I quite like peaty scotches, so I thought I would give it a go.
When I finally got around to tasting it last night I was VERY disappointed. The taste reminded me of the smells from barnyards.
So I went to the company's website to check it out.
Glenglassaugh is on the eastern edge of the Speyside district, where the Glen Moray distillery is located and to which I quite enjoyed a visit nearly a decade ago. Their website has nothing about this particular scotch under the label "whisky". Then I looked at the bottle more carefully. It isn't whisky. It is a "spirit drink", and is described a bit more fully at that section of the company's website .
Peated
Made from only Scottish peated malted barley, Glenglassaugh water and yeast. Peated to 30 parts phenol per million (PPM) and reduced with Glenglassaugh water to 50% abv. Not chill-filtered, no maturation, no colour and bottled on site at Glenglassaugh distillery.
Well nuts. It isn't aged (no maturation!). It is clear because it isn't aged in bourbon or sherry casks. It's basically barley mash. Blech.
So from now on I must check the labels more carefully. Even if something is in the scotch section of the store, if it says "spirit" and doesn't say "whisky" or "whiskey", I will almost surely avoid it.
Update: The night that I wrote this piece, I also fired off the following quick note to the distillery:
Subject: Ugh
I just bought a small 200ml bottle of clear peated Glenglassaugh. It is truly horrid stuff.
This morning I received the following email from a representative of Glenglassaugh:
Having spent my entire life in the whisky industry I would say that it's the finest I've ever tried.
This morning I attended a breakfast being held in honour of some of the new inductees into the Canadian Baseball Hall of Fame: Jorge Bell, Tim Rains, and Rob Ducey. Also present (among many others) was Tom Henke, who was inducted two years ago.
Before the breakfast I had the opportunity to chat informally with these four players. It was really clear that the players are not entirely sold on the "Moneyball" approach to understanding baseball.
I told them that over two decades ago I had been a member of a group on the internet that was promoting the use of OPS [On-base-percentage Plus Slugging-Average] as a simple tool to assess the abilities and contributions of players. Rob Ducey laughed and good-naturedly turned his back on me.
I added that when I was doing local play-by-play, I insisted that the screen show OBP and not show RBIs. But then Jorge Bell and Tim Rains both "expressed disappointment" with the over-emphasis on on-base-percentage by the teams during the past decade.
Ducey asked me, "What good is just getting on base?" I pointed out that so long as you're getting on base, you're not making outs, and that's pretty important. I added that OPS includes hitting for power as well as avoiding outs.
Bell and Rains then started praising base-stealing from lead-off hitters. Bell in particular was complaining that he had been coaching a player to become a lead-off hitter, but he'd been told to concentrate on on-base-percentage instead. He mentioned how good Rickey Henderson was at stealing bases.
Unfortunately the conversation ended then as breakfast was announced. I was about to point out that Rickey Henderson was able to steal so many bases because he got on base so often. And I know that if we'd had more time, I would have asked what makes a good lead-off hitter if it isn't a high OBP.
The point of this post is that players, especially veterans, have not all bought into the Sabremetrics approach to baseball.
A second point is that just because someone was a star player that doesn't mean they would be a good analyst or general manager.
Henke, Bell, and Ducey all signed my very old Blue Jays necktie (in that order from top to bottom in the photo below). Their signatures are in Sharpie just above the blue ink signature of Paul Beeston. He signed the tie when he was at The University of Western Ontario to receive an honorary degree probably nearly 20 years ago.
Special thanks to Barry Wells, who made it possible for me to attend the event.
This afternoon, by mistake I assure you, I bought something called Jip Jip Rocks, a sparkling shiraz from Southeastern Australia. It was a $19 mistake, more than I usually pay for the plonk I like to drink, so I feel doubly foolish about it.
Nice name, but I don't even like Shiraz all that much most of the time. And to make it sparkling? eww.
Here's my theory: If a winery has a shiraz they can't sell or that they know won't sell very well, they can sparkle it up a bit, put it in a dark bottle consumers can't see through, and give it a neato name. It'll move then, albeit somewhat slowly if people read the friggn labels (which I didn't do carefully enough).
Ugh.
Update: You know what? after a glass or two, the bubbles sort of counteract the tanin in the shiraz, and it isn't half bad.... ;-)
From Carpe Diem via JB (my favourite drug dealer),
Charles Morris (who accurately predicted the crash of 2008) discusses the main themes of his new book “Comeback: America’s New Economic Boom” with NPR, here’s an excerpt:
It’s the best-kept secret in the economics media: The United States is on the brink of a period of solid, long-term growth rivaling that of the 1950s and 1960s. It is not a finance-driven, self-destructive boom, like the 2000s’ housing bubble. No, the new economy will be durably grounded in energy and heavy manufacturing, even though it will take several years to come to full fruition.
Why haven’t you heard about the boom? Official economic forecasters, like the International Monetary Fund and the Congressional Budget Office, simply have not factored America’s emerging new economy into their forecasts. Instead, they still see us limping along at an average of 2 to 2.5 percent real (after inflation) growth to the farthest horizon — a hobbled, aging power, borne down by debts and deficits, shorn of its old bounce-back vigor, tottering along just fast enough to stave off out-and-out stagnation.
The most salient is the sudden emergence of the United States as a major energy producer. A recent U.S. Geologic Service study concluded that the Bakken Shale in North Dakota and Montana, already crowned as the U.S.’s largest-ever gas and oil reservoir, has far greater recoverable reserves than previously thought. At about the same time, a team from the University of Texas completed a well-by-well analysis of the Texas Barnett Shale — the most intensively developed shale field in the world — and confirmed that the fields can support decades of further development. The current official estimate — that by 2020 or so the U.S. will surpass Saudi Arabia in oil output, and Russia in gas — remains on track, and the country will be a major global energy producer far beyond that, which will do wonders for the U.S. trade deficit.
Energy production is a good job producer, offering classic blue-collar jobs at high pay to people without college degrees. Oil and gas rig workers can pull down $100,000 annual incomes before they’re thirty. Daniel Yergin, a leading energy analyst,estimates that the sector now accounts for 1.7 million jobs, including energy production itself, its direct supply chain, plus the multiplier effects from the additional spending power.
Each shale well requires up to 100 tons of high-quality steel pipe; fleets of specially adapted trucks and trailers; a small hangar of earthmoving, drilling and other equipment; specialty chemicals, sands and ceramics; and some very high-end seismic and other underground imaging gear. Many of these products are now U.S. specialties. According to the annual Oil & Gas Journal survey, American oil and gas industry investments will total $348 billion in 2013, equivalent to about 2 percent of GDP, with much of the investment flowing in from overseas.
This analysis should apply equally to southern Saskatchewan and southern Alberta. Indeed, economic activity seems to be at a feverish pace in these regions as well as in ND and Montana. But if these shale fields will produce tonnes of oil and gas, so will similar fields in China, western Russia, and who knows where else.
So the global economy likely has very cheap fossil fuels to look forward to for the next century at least.
So much for "peak oil", energy dependency, and the "need" for renewable energy for a long time.
I don't believe a word of this for many reasons. But it does generate some interest.
Despite everything you may have heard from your mom, picking your nose and eating what you find may have some health benefits, according to a biochemistry professor at the University of Saskatchewan in Saskatoon.
Please note that the prof who suggested this hypothesis teaches at The University of Saskatchewan. My teaching of late has been at the University of Regina.
I have no idea how reliable this information is. But if it is correct, and if the observed data all lie outside and below the predictions of the models, then it is time for the people who model climate change to change their models.
Note that these are temperatures from the "troposphere". Also see this for comments.
One of the reasons I like to arrive early at the theatre is so I can read through the programmes. At the local amateur and semi-professional level, I like to read the directors' notes and the biographies of the casts and crews. At the professional level, I enjoy reading the notes about the performances.
Lately, though, I have been disappointed by many theatre programmes.
Several of the recent London Fringe Festival shows had no programmes at all. They should; even if they are only quick half-sheet notes. Furthermore, those shows that did have programmes provided useful and interesting information for the most part, but they didn't distribute them until we went into the theatre, which was only five minutes before the performances began and hardly allowed enough time to read the programmes in advance. In the future, it would be nice if the producers of Fringe Festival shows all had programmes and distributed them at the time we buy our tickets so that while we are waiting in the lobby we can read about the actors and read the programme notes.
Also over the past month I have attended several shows in Stratford. The Stratford Festival provides extensive programme notes for their shows, but they also have some problems with their programmes. First, the print is gray, not black, and the lack of contrast makes the programmes difficult to read in the dim theatre light. And second, the blathering insights from professionals are just too long in the time available and too, well, blathery, for my tastes (though I understand others might like all those words).
One programme I really liked recently was the one for Marlowe's Edward II. The director (Kaitlyn Rietdyk) wrote interesting notes and insisted the actors' bios list only three credits and nothing else. A general statement thanking everyone's family and friends suffices; colour me curmudgeonly, but there's no need for each actor to write these things in their bios.
Robert Fogel died today. The Nobel-Prize winning economist was 86. There is a wonderful obituary for him, describing his life and his impact on the study of economic history in the NYTimes. I'd like to offer some personal reflections on this man because he played an important role in my decision to return to studying economics.
I took two courses from Professor Fogel in the winter and spring of 1967 during his first few years at The University of Chicago. I was technically a Chicago Theological Seminary student, but I had pretty much decided to leave seminary. Fortunately, the seminary was affiliated with The University of Chicago, and I was able to take some economics courses there to complement my theological studies.
One of the courses I took was called "Strategic Factors in American Economic Growth" and was taught by Fogel. I had no idea who Fogel was, and I thought I was going to study economic theory about economic growth.
I got to the first day of class and realized, much to my chagrin, that I had actually registered for a course in Economic History. Bleah. I had absolutely no interest in studying economic history. But Fogel was captivating in that first class (of about 20 grad students and 5 upper-level undergrads).
I signed up to give the first in-class presentation (about three weeks hence) and had a blast. Fogel was a treat -- he worked us through the "new" methodology of economic history which was basically just seeking data and subjecting hypotheses to empirical test. I also started attending the Economic History workshops, where I learned a great deal and again had a wonderful time. Despite my horrid undergraduate record, Professor Fogel tried to get fellowship money for me to continue my studies in economic history there, but my record was just too horrid for that to happen.
At one point I asked him, "What did you do before you went to graduate school?"
He replied, "I was a professional student radical."
"Really??"
Fogel: "Actually I was an organizer for the Communist Party."
I was stunned. He seemed like a traditionally neo-classical economist to me.
"What happened? What made you leave that?"
"I kept predicting the demise of capitalism, and it wasn't happening, so I decided to study why."
Fogel was such an inspiration to me that when I continued my graduate studies in economics at Iowa State University, I tried to specialize in economic history. It didn't work out there, but I did manage to take some courses on the History of Technology in the engineering faculty, and one of the papers I wrote for one of those courses (in the spirit of everything I had learned from Fogel), led to my first academic publication, "Ancient Metal Technology and Cultural Dispersion: An Economic Analysis of Three Aspects."
Fogel's enthusiastic and open support for me was a source of strength. It helped build my confidence and reassure me that I had a future in economics.
Reflecting on Eric Snowden's revelations about NSA snooping, Don Boudreaux at Cafe Hayek writes,
Government is power. Government is not to be trusted. Ever. Even if you believe that some government is and will always be necessary, that ‘necessary’ piece of government should always be regarded as a prudent lion tamer regards the big carnivorous cats that are ‘necessary’ for him to make a living. To imagine that seemingly subdued purring lions can be trusted to be dealt with in any ways that do not include the use of strong cages, leashes, ceaseless and deep suspicion, and escape hatches is the height of romantic absurdity – wishful thinking of the most extreme and inexcusable sort. Government is by its very nature a dangerous, untrustworthy, dishonest, arrogant, slippery entity – characteristics that are by no means reduced anywhere near to insignificance by a wide franchise, regular elections, and sturdy ink-on-parchment documents called “constitutions.”
Unless you are a high-ranking government official, government - no government – is ever “Us.” It is always “Them.” And They are not to be trusted. Ever.
... which is why I have drifted toward being a quasi-libertarian.
In less than an hour this morning I saw each of these two words misused. Once in a review about eggs benedict and once in another review.
Here is a piece from Grammar Girl that points out the difference:
Compliment
A compliment, with an "i," is a kind or flattering remark. If a guy says he likes your dress, he’s giving you a compliment. He’s complimenting you.
Complement
A complement, with an "e," is a full crew or set, and when something complements something else, it means they go well together. You might talk about a picture frame that complements a photo or the crew complement needed to operate a ship.
A Trick to Remember the Difference
To remember the difference between the spellings of these words, be a nice person and tell yourself
I like to give compliments.
Put the emphasis on the "I" when you say or think it. The "I" can remind you that the type of flattering compliment is spelled with an "i."
My father died of a heart attack when he was 43. My mother died of heart disease when she was 78. But three of my four grandparents lived into their 80s, and one grandmother lived to 96.
This history, combined with my cholesterol blood readings, has led my family physician to recommend that I take statins as a preventive measure. My good cholesterol is sky-high good, but the bad cholesterol and total cholesterol readings are in the "moderate-to-high" risk range. The cholesterol readings themselves would not have led her to put me on statins, but combined with my family history they did.
I had doubts and questions, resisting them for a long time. And now I read this, which suggests that statins as a preventive medicine are not all that effective and can have some serious side effects.
The medical community is debating the pros and cons of using statins for prevention as more independent research comes out on side-effects. This week, a study in JAMA Internal Medicine suggested statins may be associated with an increase in musculoskeletal conditions and pain, especially in physically active individuals.
"If you look at all the studies that have ever been done with statins for primary prevention, so for people who have never had a heart attack or a stroke, if you give a statin to a patient for about five years we can reduce the chance of a person having a heart attack or a stroke by about one per cent," said James McCormack, a professor of pharmaceutical sciences at the University of British Columbia.
This stuff raises serious doubts in my mind about continuing to take statins as a preventive measure. The comments there are lengthy and well-worth reading as well.
One recent meta study is here [h/t Jack]. My take on this article is that the higher potency statins might have some small effect on reducing heart attacks, strokes, etc., but that the effect is small and barely significant, either statistically or medically. The material in this study is fairly well-summarized in its Figure 2 and the accompanying table, reproduced here (you may have to click on it to see it clearly).
The potential effectiveness of statins is masked, somewhat, by the inexplicable use of a log scale on the horizontal axis. Also, I would settle for 90% confidence intervals for things like this. But still, it looks as if statin use as a preventive measure has at best only a small expected effectiveness on average.
And yet for a person saved from a heart attack, that is hardly a minor effect.
George Will has a terrific column in today's Washington Post in which he takes on the US sugar industry, its protection from competition, and the gubmnt subsidies it receives, both directly and indirectly. I would add that because the price of sugar is high, that leads to increased demand for high-fructose corn syrup, which has affected many things (including the taste of Coke?)*.
In the last four years, the U.S. sugar price has averaged between 64 percent to 92 percent higherthan the world price. The costs are dispersed to hundreds of millions. The benefits accrue primarily to 4,700 sugar beet and sugar cane farms....
The government guarantees up to 85 percent of the U.S. sugar market for U.S.-produced sugar. ... Surplus sugar — meaning that which U.S. producers cannot profitably sell — is bought by the government and sold at a loss to producers of ethanol, another program whose irrationalities are ubiquitous.
President Lincoln’s biggest blunder was .... creating the Agriculture Department. Since 1995, 75 percent of all agriculture subsidies have gone to the largest and wealthiest 10 percent of farms. Largely because of steadily loosened eligibility criteria — loosened at the collaborative behest of agriculture interests and the “caring class” (i.e., welfare workers) — food stamps are now used by 48 million Americans. The stamps buy less than they would were sugar quotas not raising the price of every edible thing, from ketchup to bread to yogurt, that contains sugar. But, then, big government always is most caring about the strong, the articulate and the organized.
*I called Coca-Cola about 25 years ago to ask why the taste of Coke was less rough/metallic, a taste I had come to enjoy, and asked if they had changed the formula. They said they hadn't changed the formula; all they had changed was the sweetener they use.
Ms. Eclectic and I went to see Measure-for-Measure at the Tom Patterson Theatre in Stratford last night. It was a mixed experience.
We hadn't been to that theatre in many years, not since it was called "The Third Stage" and had general seating on plastic chairs. We bought some comparatively inexpensive seats from their website back in the winter. Never again will we buy such cheap seats without understanding the seating map.
We were seated beyond/behind the proscenium! We could still see most of the stage, but not all of it. And when you sit that far around (and nearly behind the back of) the stage, there are times when you miss some action and can barely hear the actors.
To make matters worse, we were seated amidst a high school class. That's a risk when you buy inexpensive tickets. In fact as we saw and heard them approach the theatre in a group from outside, I groaned and hoped they wouldn't be sitting near us. Ugh.
Their teacher was totally engrossed in the play, leaning far forward the entire time and making it even harder for us to see and hear the performance. And the students behind us insisted on whispering at times, despite our glares.
The play itself was brilliantly performed, staged, and directed. For the most part, the acting was superb and the staging simple but very effective. After the show, Ms. Eclectic asked me which actor I thought was best. It was an unanswerable question, we discovered, because there were so many good performances. All the leads and most of the supporting actors were just plain excellent. We were less-impressed with some of the over-the-top performances that go over so well with most audiences but just get in the way so far as we are concerned. In that respect we agreed with the Sun reviewer (see below).
But the point of this posting: From now on, no more cheap seats for us. We'll go less often rather than sit there.
For years teachers in Ontario were allowed to "bank" their sick days. The idea was that if someone wasn't sick one year, they could save those days for future years when they might suffer from a serious illness that would keep them off the job for an extended period of time.
Some teachers piled up very large numbers of sick days in their "bank", which led to problems when they tried to claim the days or compensation for them when they neared retirement.
Their latest contract with the Province of Ontario no longer allows teachers to bank sick days. The result? For some inexplicable reason, many teachers who were not sick much or at all earlier in the school year are suddenly becoming ill as the school term draws to a close. From the Trono Star,
Ontario school boards are scrambling to cover a record number of teachers taking time off, as they use sick days they no longer can bank until retirement.
The sudden need for substitute teachers in recent weeks has so outstripped supply — especially on Fridays and Mondays — that some elementary principals have asked librarians, special education and ESL teachers to scrap regular duties for a day to supervise classrooms.
We live in downtown London (Ontario), right at the fork of the Thames River. Several days ago one of our neighbours wrote that she had seen deer on the lawn of our condo building. This morning when I looked out the window, I saw two deer in the park right across the street.
So grabbed my camera to take some photos. In this first one, unfortunately I had left the flash turned on and it reflected off the bedroom window. I've cropped and adjusted the photo a bit, but it still is not very clear.
By the time I got the flash turned off, the deer were moving back toward the river. I panicked a bit and didn't hold the camera steady for the next photo.
It is exciting to see the deer. The river habitat, even in downtown London, might be able to support them for quite some time. But I really doubt if this is the right place for them.
Another speaker at the July 12th Rocky Mountain Economic Summit in Jackson Hole will be William Dunkelberg, of the Global Interdependence Center. He has recently written
“We are to heal the damage done by a credit binge by making even more loans and encouraging ‘risk taking.’ The Fed has done all it can to encourage more borrowing, forcing interest rates as low as possible, flooding the banking system with liquidity, and accumulating a balance sheet of terrifying size. This cloud hangs over the economy, a wet blanket of uncertainty that prevents private sector participants from making bets on the future.
Compared to the 1983 recovery when GDP grew 8 percent, this has been a very weak recovery, not even reaching trend growth. The Fed is committed to purchase $1 trillion in government back[ed] assets while the CBO projects the deficit to be only $650 billion. Just how this will help is becoming less and less clear.”
Putting this together with the previous post, one possibility is that because of the "wet blanket of uncertainty", investors are loathe to invest in real capital, likely because of the regime risk. As a result they keep putting their lendable funds into financial assets even though they expect negative real returns.
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
One of the speakers at the Rocky Mountain Economic Summit on July 12th will be David Kotok, chief investment officer of Cumberland Advisors and vice chair of the central banking series at the Global Interdependence Center. He recently commented on negative interest rates:
There seems to be a debate at the European Central Bank (ECB). The issue is whether or not the ECB should impose a negative interest rate. Negative interest rates are the ultimate in market distortions. They employ only a stick and no carrot. Their use tends to progress from disincentive through penalty to punishment.
Of course, depending on inflationary expectations, we probably have negative real interest rates in North America now and have had them for some time [if people expect the rate of inflation to be greater than the rate of interest, that means they actually expect to lose purchasing power with their investments; but losing a little is still better than losing a lot, which is what they'd do if they just held cash.].
What puzzles me is why so many people lend at negative real interest rates. Are there so few good investment opportunities offering better expected rates of return?
The glib explanation is that the marginal product of capital is expected to be very, very low (i.e. people don't think there are [m]any good investment opportunities out there).
But why is that? Is it uncertainty about the political future? Uncertainty about global stability? Or are there other explanations?
My attendance at the summit is supported by several sponsors, including the Department of Economics at The University of Regina.
Ms. Eclectic and I have pre-planned and pre-paid for our funerals and burials, including the grave marker.
In keeping with my moniker, "Godfather of the Ban the Penny Movement", we had a cut-out made at the bottom of a column of hearts and glued a penny there.
The penny is from 1982, the year we were married (thank you Karen L and Nick K and others for providing us with several 1982 pennies!)
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